Did taxpayers lose on deal for oil field?: Elk Hills timeline

6:31 pm, October 27, 2000Updated: 12:19 pm, May 19, 2014

October 27, 2000

1922 WASHINGTON, October 27, 2000 — 1912: Out of concern for the long-term availability of oil supplies for naval ships, President Taft establishes Naval Petroleum Reserve No. 1 near Bakersfield, Calif. Over the next few years, his administration adds two more oil and three oil shale reserves in the West to the program. They remain essentially undeveloped until 1976.

1922: NPR-1, informally known as Elk Hills, is part of the “Teapot Dome Scandal” in which oil barons bribed Secretary of the Interior Albert Fall for secret oil drilling leases during the Harding administration.

1976: During President Carter’s term, the Arab oil embargo of 1973-1974 leads Congress to pass the Naval Petroleum Reserves Production Act to open NPR-1 and 3 for production on July 3. The law required that the reserves be operated at maximum efficient rates. From 1976 to its transfer to Occidental in February 1998, Elk Hills alone generated $17.1 billion in revenue for the U.S. Treasury, against expenses of $3.3 billion.

1985-1994: In every year but one, the White House’s Office of Management and Budget proposes the sale or lease of Elk Hills under the Reagan, Bush and Clinton administrations, but each time, the Democrat-controlled Congress shoots the proposal down.

July 1993: The Senate Armed Services Committee requests that the Department of Energy utilize the National Academy of Public Administration to study management alternatives for the Naval Petroleum and Oil Shale Reserves, including the concept of corporatization, or turning the property over to a government corporation.

May 1994: The NAPA report recommends turning Elk Hills and the other Reserve properties into a wholly owned, for-profit government corporation.

November 23, 1994: A memo appears on the desk of Energy Secretary Hazel O’Leary asking her concurrence to have Elk Hills, by far the most lucrative Naval Reserve, run by a public corporation. All assistant secretaries have signed off on the proposal.

December 19, 1994: At a news conference with President Clinton and Vice President Gore on the “Middle Class Bill of Rights” and “Reinventing Government,” Deputy Energy Secretary White announces the administration’s intent to sell Elk Hills.

September 7, 1995: On the second anniversary of “Reinventing Government,” Vice President Al Gore presents a report by the National Performance Review, an interagency task force that made recommendations for more than 180 specific cuts in government. President Clinton says these cuts will save more than $70 billion in the next five years. One of the recommendations is to sell Elk Hills.

February 10, 1996: The Defense Authorization Act of 1996, which spells out the procedure for selling Elk Hills within two years, is signed into law.

October 1, 1997: The deadline for all bids on Elk Hills to be submitted, at noon in Houston.

October 6, 1997: DOE announces Occidental Petroleum Corp. is the high bidder on Elk Hills, at $3.65 billion. DOE does not divulge, to this day, the other bidders’ names or offer amounts.

February 10, 1998: Occidental takes over control of Elk Hills from the U.S. government.

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